blockchain (s.v. 2017-02-20 "Blockchain Terminology-a dev): · A Blockchain is a collection of Blocks refering to one another in a linear sequence all the way to a Genesis Block. Because of how the chain is created, any change to any Block in the sequence would invalidate all of the Blocks that came afterwards. This is one of the core features of a Blockchain known as Immutability.
· If two or more Blocks refer to the same previous Block Hash, this is known as a Fork. In most systems, only one of those Blocks will be considered valid, usually the one that will end up in the longest branch.
· The term "Blockchain" is also used to refer to the projects that use Blockchains. Bitcoin is a Blockchain project that contains the Bitcoin Blockchain. This term was popularized in mid-2015 by large enterprises such as Overstock and NASDAQ wanting to use the then called "Bitcoin technology" without using the term "Bitcoin" due to its various connotations. (†2098)
distributed ledger technology (s.v. 2017-01-30: "Corda and the Distributed ): · The technology seems to be focused more on transactions and less on grouping them into blocks.
· With the absence of blocks, we necessarily have to do away with any form of distributed, native currency - there is no way for that currency to be objectively generated. The system instead uses IOUs for currencies and assets.
· The system relies on a number of key nodes / entities to operate - auditors, validators, legal authorities, banks, etc. This means the system would be at best "decentralised"
· Cryptography is still used to authorise various transactions and move the money around. (†2097)
distributed ledger technology (s.v. 2017-02-20 "Blockchain Terminology-a dev): · Distributed Ledger Technology is a term used to describe a superset of the Blockchain Technology and ledgerless crypto suites (such as Corda or Open Transactions).
· The term is relatively new as of February 2017 and it may be seen as a way for governments and big companies to further move away from the terms "Bitcoin" and "Blockchain". (†2099)
fork (s.v. 2017-02-20 "Blockchain Terminology-a dev): There are multiple different concepts in the Blockchain space that are referred to as "forks".
· The simplest Fork is a Repository Fork - a term originating from software development where a developer copies a repository of a given project to create their own version of the software. This is most often used to create Altcoins - most of them are Forks of the Bitcoin repository, or other forked repositories.
· Another type of Fork is a Blockchain Fork. It is an event in which there are multiple competing blocks of the same height. Those Forks may occur naturally due to multiple Miners creating a Block each at a similar time, or they can be malicious, for example - a result of a 51% Attack.
· The last type of Fork is a Blockchain Fork caused by changes in the software operating the Blockchain (such as bitcoind). Those Forks may be incidental (such as the March 2013 Bitcoin fork), or deliberate (Ethereum's DAO fork). The latter are generally split into two kinds - Soft Forks and Hard Forks.
· Soft Forks are less invasive and mainly require the Miners to upgrade their software. Old software will still recognize new blocks created after the Soft Fork as valid. An example of a Soft Fork could be the bugfix for Value Overflow Incident.
· Hard Forks are more invasive and require everyone to upgrade their software. Old software will not recognize new blocks or transactions as valid after the Hard Fork. The Ethereum DAO Fork is perhaps the most famous example of a Hard Fork.
· Contentious Hard Forks can sometimes lead to network splits, where a part of the network and community decide not to opt into the Forked code and Blockchain, and instead decide to take a different approach. Ethereum Classic is a network split that resulted from the DAO Fork. (†2100)
mining (s.v. 2017-02-20 "Blockchain Terminology-a dev): · Mining is the process by which Miners create a Proof of Work Block in Blockchains such as Bitcoin. It is a process of iterating through many possible Blocks (often iterating using the Nonce) until the Block satisfied the PoW criteria. This involves the Hash of the Block being a number smaller than the Target for a given block.· The Miners are rewarded for creating a valid Block by the Block Reward and any Fees spent by Transactions included in the Block.· There are also a handful of minor activities similar to Block Mining that serve a different purpose. As Addresses are essentially random numbers, some people iterate over them in a process of Vanity Address Mining to create a desirable looking Address (similar to vanity plates for cars). One can also mine for different Transaction Hashes, but it's a fringe activity used only in special cases. (†2101)
node (s.v. 2017-02-20 "Blockchain Terminology-a dev): · A Node is a computer running the specialized software used to communicate directly with a Blockchain Network. A Node is often a Wallet, but it doesn't need to be.· Generally, there are two types of Nodes - a Full Node and a Light Node.
· A Full Node downloads and stores all of the Blockchain information. It can provide the data to other Nodes in the network as needed. Distributed Blockchain Networks require a web of Full Nodes to be operating at all times to maintain the network.
· A Light Node only downloads the core data it needs to validate the current Blockchain status (most often - Block Headers) and any information relating to the Addresses it cares about. It has a much lower memory and network footprint than a Full Node, but it cannot provide all of the information a Full Node might. A set of Full Nodes is till required to maintain the network. (†2102)
nonce (s.v. 2017-02-20 "Blockchain Terminology-a dev): A nonce is a random number used to easily create a different input. It is most notably used in a Block Header to create a different Block Hash without changing any important information stored in a Block. This is most often used in Proof of Work Blockchains that need to iterate over many block hashes. Due to the avalanche effect, changing even a single bit in the nonce creates a completely different Hash.
(†2103)
permissioned blockchain (s.v. 2017-02-20 "Blockchain Terminology-a dev): A Permissioned Blockchain is a Blockchain Project that restricts access to its Blockchain in some way to the users. It could require user authentication before they can connect their nodes to the network, or even download their Clients.
· In contrast, Permissionless Blockchains, such as Bitcoin, are inclusive by nature, allowing anyone to join and transact on the network.
· Permissioned Blockchains are still in early phases of adoption as of February 2017. For their time being, their target market consists of banks, governments and other large entities that want to exert some form of control over their Blockchain network. This could be done due to regulatory, KYC or other reasons.
· Some Permissionless Blockchains do offer some features for their users to restrict access to some of their financial assets. Ripple allows explicit white- and blacklists of Addresses, while Smart Contract scripts give even finer control over how a given asset can be used. (†2104)
proof of work (s.v. 2017-02-20 "Blockchain Terminology-a dev): · Proof of Work is a Block creation algorithm that uses a Hashing algorithm to ensure predictable Block creation rate. It relies on the fact that a Hash of a Block is essentially a very large random number, and that it takes some computational time to create the Hash. While it might take a fraction of a second to create one Hash, having to create a lot of Hashes takes a significant amount of time and resources.
· A valid Block has a Hash smaller than a given Target (see Difficulty). To create a Hash that satisfies that criteria, the Miner needs to compute many potential Hashes until they find a satisfactory one. Since Hashes are essentially random numbers, it is easy to approximate how many times one would need to compute a Hash to get one that is small enough.
· As more Miners join the network with more powerful Mining machines, they naturally can compute more Hashes in the same amount of time. The Proof of Work algorithms are designed to handle that by making it harder to compute a valid Hash by lowering the Target more and more. If the Miners leave the network and the available computational power decreases, the Target increases to maintain the Block creation speed.
· Another important design of the Proof of Work algorithm is that it takes a lot of computational power to create a valid Hash, but very little to verify it (one needs to hash the data once).
· Proof of Work is used to secure the Blockchain Network from attackers trying to subvert it (they would need to have a lot of spare computing power), as well as to create a fair distribution model for the Coins (Miners are rewarded with newly minted Coin for creating a valid Block). (†2105)
smart contract (s.v. 2017-02-20 "Blockchain Terminology-a dev): · A Smart Contract is a simple computer script that represents an implicit contractual agreement between the parties to transact in the way described by that contract ("Code is Law"). Smart Contracts are an important aspects of such Blockchain Projects like Ethereum. In contrast to traditional legal contracts, Smart Contracts do not need a legal team to enforce them, and once put in place they usually cannot be altered. Smart Contracts can contain functions that can be called by creating a specific Transaction. The code execution is deterministic and is carried out by the Miners. · Smart Contracts may be paired with legal contracts (such as in the case of Corda), but that's rarely the case on most Blockchains. (†2106)
